That announcement may pave the way for Janet Yellen to take over the helm. She would be the first woman to lead the Fed in its 100-year history.

Yellen is currently the Fed's vice chairman. Experts said she has a solid record as a bank regulator. Yellen has also been teaching at the Haas School of Business at UC Berkeley for more than 30 years.

The dean of the business school, Rich Lyons, said he cannot think of a more qualified candidate.

"She listens; she is a terrific thinker and a very clear-minded person," Lyons said. "All the judgment I've seen at Berkeley-Haas has been absolutely terrific."

Lyons added that Yellen has always been a consensus builder.

She also has the backing of a number of Democratic senators, and that could make the confirmation process much less controversial as well.